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HK property risks rising
Source: Bloomberg News |
June 20, 2011, Monday
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Hong Kong's government may take more measures to curb property-price gains as "risks" are rising, Financial Secretary John Tsang said yesterday.
"The current market situation is abnormal," Tsang wrote in his official blog. "It is difficult to predict the outlook of the property market but one thing for sure is that risks are increasing continuously. We have no hesitation to increase the intensity of measures if necessary."
Government officials have been warning of an asset bubble in Hong Kong, where home prices have surged more than 70 percent since the beginning of 2009 on record low interest rates and an influx of buyers from other parts of China.
Since late 2009, the government has raised minimum down payments for mortgage borrowers, increased land supply and imposed additional transaction taxes to curb real estate value.
"The government measures were not intended to bring down the property market," Tsang said. "I am aware of some public concerns that the property market may soon enter a downward cycle and that more drastic measures may lead to a hard landing."
Hong Kong's "soaring" real-estate market may be at risk of a "sharp correction," Standard & Poor's said last week. Hong Kong Chief Executive Donald Tsang said on Friday that home prices were "quite frightening'' as Chinese mainland's growing wealth fuelled increases of 2 percent a month.
He also said the government may introduce more measures to slow the property market.
The most recent measures, announced on June 10, include requiring borrowers whose income is from outside Hong Kong to deposit an extra 10 percent when they buy unless they can demonstrate a "close connection" to the city.
Hong Kong's peg to the US dollar means the city follows interest rates set by the Federal Reserve, which has held its benchmark rate at a range of zero and 0.25 percent since December 2008.
The government may unveil a plan to resume the construction of government-subsidized housing, known as the Home Ownership Scheme, the Hong Kong Economic Times said on Saturday.
The property market has been "volatile" since November and there are signs of "renewed exuberance" after the market cooled down in March and April, Norman Chan, chief executive of the Hong Kong Monetary Authority, said in on June 10. Chan warned about the risk of a "credit-fuelled property bubble."
Home prices dropped 1.01 percent in the week ended June 12, the biggest weekly drop in six months, said Centaline Property Agency Ltd, Hong Kong's biggest privately held realtor.
Savills Plc ranks the city as the most expensive place in the world to buy an apartment.
"The current market situation is abnormal," Tsang wrote in his official blog. "It is difficult to predict the outlook of the property market but one thing for sure is that risks are increasing continuously. We have no hesitation to increase the intensity of measures if necessary."
Government officials have been warning of an asset bubble in Hong Kong, where home prices have surged more than 70 percent since the beginning of 2009 on record low interest rates and an influx of buyers from other parts of China.
Since late 2009, the government has raised minimum down payments for mortgage borrowers, increased land supply and imposed additional transaction taxes to curb real estate value.
"The government measures were not intended to bring down the property market," Tsang said. "I am aware of some public concerns that the property market may soon enter a downward cycle and that more drastic measures may lead to a hard landing."
Hong Kong's "soaring" real-estate market may be at risk of a "sharp correction," Standard & Poor's said last week. Hong Kong Chief Executive Donald Tsang said on Friday that home prices were "quite frightening'' as Chinese mainland's growing wealth fuelled increases of 2 percent a month.
He also said the government may introduce more measures to slow the property market.
The most recent measures, announced on June 10, include requiring borrowers whose income is from outside Hong Kong to deposit an extra 10 percent when they buy unless they can demonstrate a "close connection" to the city.
Hong Kong's peg to the US dollar means the city follows interest rates set by the Federal Reserve, which has held its benchmark rate at a range of zero and 0.25 percent since December 2008.
The government may unveil a plan to resume the construction of government-subsidized housing, known as the Home Ownership Scheme, the Hong Kong Economic Times said on Saturday.
The property market has been "volatile" since November and there are signs of "renewed exuberance" after the market cooled down in March and April, Norman Chan, chief executive of the Hong Kong Monetary Authority, said in on June 10. Chan warned about the risk of a "credit-fuelled property bubble."
Home prices dropped 1.01 percent in the week ended June 12, the biggest weekly drop in six months, said Centaline Property Agency Ltd, Hong Kong's biggest privately held realtor.
Savills Plc ranks the city as the most expensive place in the world to buy an apartment.
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